What is PEG Ratio (Price/Earnings to Growth)?
The PEG ratio adjusts the P/E ratio for expected earnings growth. It helps determine if a high P/E stock is actually overvalued or simply growing fast.
Formula
PEG Ratio = P/E Ratio ÷ Annual EPS Growth Rate (%)
How to Interpret
PEG below 1 suggests the stock may be undervalued relative to its growth. PEG above 2 may signal overvaluation.
Typical Ranges
Below 1.0 = potentially undervalued, 1.0-1.5 = fairly valued, Above 2.0 = potentially overvalued
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter Indian stocks by PEG Ratio.
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